There is a growing trend of start-up activity in Tier-2 and Tier-3 cities, signalling the democratisation of entrepreneurship.
India’s emergence as a centre of technological and entrepreneurial innovation is a cause for celebration. From being ranked in the third quartile among innovative nations a little over a decade ago, the country’s innovation landscape has experienced a remarkable transformation. India has emerged as a global powerhouse of creativity and technology.
This change is evident in India’s thriving start-up ecosystem. The country has emerged as the third-largest start-up landscape globally, with the number of tech start-ups projected to grow from 68,000 in 2023 to 1,80,000 by 2030. As of January this year, India boasted 111 unicorn start-ups with a combined valuation of over $350 billion, demonstrating the economy’s ability to nurture high-value companies across various sectors. Notably, this start-up revolution is no longer limited to major cities. There is a growing trend of start-up activity in Tier-2 and Tier-3 cities, signalling the democratisation of entrepreneurship.
Five key initiatives have contributed to India’s improved standing in the Global Innovation Index. First, India’s rise is fueled by its robust innovation ecosystem, characterised by a vast knowledge capital, a dynamic start-up landscape, and collaborative efforts between public and private research entities. The Department of Science and Technology’s NIDHI (National Initiative for Developing and Harnessing Innovations) programme has established a network of technology business incubators and science and technology entrepreneur’s parks across the country, bringing together public institutions and private start-ups to commercialise innovation. Second, various government-led initiatives, including those by the Departments of Science and Technology and Biotechnology as well as the Atal Innovation Mission, have played crucial roles in enriching the national innovation environment. Third, policy-driven innovation, spearheaded by NITI Aayog, has optimised efforts in strategic sectors such as electric vehicles, biotechnology, nanotechnology, space, and alternative energy. Fourth, India has demonstrated notable progress in key indicators like domestic industry diversification, patent origination and exports of cultural and creative services. Finally, among lower-middle-income countries, India stands out for having the highest innovation quality.
We can examine specific instances of how these crucial initiatives have worked. The NITI Aayog has been working closely with the Ministry of Railways to fast-track the redevelopment of railway stations across India through public-private partnerships. Similarly, the pharmaceutical industry in India has adopted a new business model in which firms undertake contract manufacturing and clinical trials for multinational companies. This allows Indian firms to participate in global pharmaceutical innovation processes.
The Atal Innovation Mission (AIM) did what previous initiatives could not — fostering innovation at the grassroots level. It has established over 4,880 operational Atal Tinkering Labs in more than 650 districts, providing access to innovative tools to over two million students. It has also selected 102 universities, institutions and private players to establish Atal Incubation Centres with over 50 operational centres nurturing more than 900 startups. It has also organised over 24 Atal New India Challenges in partnership with five Union ministries and departments, receiving 950 applications, of which 52 have been selected for grant-in-aid and hand-holding.
Today, India is the top innovative lower-middle-income economy in the world, ranking first among the 37 lower-middle-income group economies and first among the 10 economies in Central and Southern Asia. From being ranked 81 in 2015 it has reached the 40th position in the world today. More significantly, India ranks fifth in ICT services exports, sixth in venture capital received, eleventh in graduates in science and engineering, and thirteenth in global corporate R&D investors.
The impact of these initiatives extends beyond statistics. A culture of innovation is now seen even at the school level. Importantly, this initiative is not restricted to Tier 1 cities but spans the entire country, encompassing virtually all top-notch sectors of the economy.
All this means millions of young innovators and entrepreneurs in the making. The cascade effect will be tremendous, propelling India’s innovation ecosystem to new heights. It would not be partisan to attribute this success to the vision and persistence of Prime Minister Narendra Modi. This transformation is his brainchild.
The writer is with the BJP and is a former finance minister of Punjab
